According to the South Florida Business Journal, as of June 30th, the number of loans backed by the Small Business Association had fallen nearly 50% in South Florida.

What does this mean for South Florida businesses?

In the past nine months, only 367 loans backed by the SBA were given to South Florida businesses; compared to more than 1300 SBA loans offered during the same time frame last year. This drastic decline in loans has resulted in a loss of approximately $100 million in funds for South Florida businesses.

Although the stimulus package passed earlier this year increased the guarantee on SBA loans to 90 percent in an attempt to reduce the risks to lenders, the package has not caused an increase in lending from many banking institutions.

Is all hope lost for businesses in need of SBA loans?

No. Despite the decline in SBA lending, there is much to be hopeful about. While large lending institutions like Bank of America and UPS Capital are cutting back on the number of SBA loans they’re offering, smaller community banks in South Florida are not.

According to Althea Harris, spokesperson for the SBA South Florida district office, “As these newer banks get efficient in making these loans, we will see an increase in lending activity among those banks.”

Total Bank and BankAtlantic are a couple of local community banks that are not reducing, but increasing their lending to businesses.

Source: South Florida Business Journal